Apple is reportedly talking with large cable operators about using an Apple set-top box for live programming, according to the Wall Street Journal.
The talks illustrate that Apple is seeking a less radical path to expand in television than it has contemplated in the past, namely teaming up with existing service providers rather than licensing content to compete with them directly.
The Journal notes that the Cupertino company doesn't appear to have reached any deals, stemming largely from pay TV operators' reluctance to let Apple into the industry, "worried about ceding control the same way record labels and wireless carriers have done in the past." Apple's iTunes championed single-track sales, transforming a record industry that was fatigued by illegal downloads in the Napster era. Its foray into phones has also revitalized the wireless industry, but carriers are burdened with the cost of delivering service for iPhones.
But what about the fancy Apple TV sets we've been eagerly anticipating? Two of the Journal's sources say the technology could be embedded into televisions, noting that Apple has had TV prototypes in the past. The cable set-top box is also a resurrected idea that dates back two years from the latest version of Apple TV.
At the time, Apple's then CEO Steve Jobs was dismissive of the idea, believing working with cable operators was problematic because they didn't have national reach—each served only defined geographic territories. Another issue: entertainment companies own most of the content, not the operators, according to two people familiar with the meetings.
Pay TV operators remain weary with weak Apple TV sales, not to mention the company's 30 percent cut on in-box transactions. But the Journal notes that a deal with Apple could also reduce the amount of money operators spend on set-top boxes. While WSJ doesn't go so far to say Apple could help the industry win back cord cutters, it noted that it could "help [cable operators] hang on to consumers who can watch video through a growing array of Internet alternatives, as both traditional TV and Web video would be available through the same device."
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